Indigenous Investors Weekly Insights!
Top 3 well curated stories from the stable of Indigenous Investors incase you missed them. These can range from finance to sports, depends on what made the headlines. Stay tuned.
At Indigenous Investors, we pride ourselves on a simple but powerful habit: reading for 5 hours every single day. It’s something we’ve shamelessly borrowed from the Oracle of Omaha, Mr. Warren Buffet. To share the wealth of knowledge we uncover, we’re bringing you 3 top stories that you may have missed this week. If there’s a topic you want us to cover, drop us a line! We’re always excited to read more and refine our process.
The golden rule of stock market is that what lies ahead matters more than what has already happened and the markets globally gave a classic example of just that. While everyone expected the Fed to reduce rates, they were disappointed by the revised projections of Fed. The markets in the US, Europe and India got hit hard and are continuously trading in red since.
The Fed has projected only two more rate cuts by the end of next year versus the market expectations of 3 to 4 cuts.
Story #2: ITC announced demerger of its Hotels business effective January 1, 2025 (click here)
ITC announced the demerger of its hotel business on January 1, 2025, as the effective date. Demerger means splitting an existing company, where the parent company separates a part of its business into a new, independent company. Shareholders also supported ITC’s decision in June 2024, with 99.6% voting in favor of the demerger.
ITC says that this demerger will help focus on their core businesses of FMCG, tobacco, and agriculture, and will also be helpful in attracting investors to the hospitality sector. After the demerger, ITC will hold a 40% stake, and the other 60% will be held by shareholders in proportion to their shareholding. For every 10 ITC shares held, shareholders will get 1 share of the new ITC Hotels Ltd.
Story #3: RBI’s intervention in Forex market increases as INR is breaches a new low (click here)
One of the lesser known jobs of the RBI is to maintain the balance of currency exchange rate. With the Fed planning to make fewer rate cuts in 2025, a huge spike in gold imports by India in the previous two months due to festive & marriage seasons and sluggish numbers on the side of exports have put pressure on the INR as it crossed 85.08 per USD mark.
The RBI, in order to maintain the exchange rates, have intervened by selling USD in the spot and futures market to gain some control over the situation. When the currency is depreciating (in case of INR, going from INR 80 / USD to INR 85 / USD), the central bank sells USD and buys INR. This increases demand for the INR, which helps in stabilising or boosting its value.
In such turbulent times, it has become extremely important to make sure your money is invested at the right places. You can read our article on Portfolio Reshuffling (click here) to get professional insights into managing your wealth.